That's a fair take, and I can agree with that.
Though tbh, my preference is there to kind of be kind of two kinds of items.
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'expected' items. Not every system needs this, but I think two solid examples are PF2e, and World of Darkness. In PF2e, there's solid guides on expected gold per level, and when players should have access to what tier of item, and how much they should have. Whereas in WoD, (magic) items are buyable with XP, so they're as much a part of your build as any other stat or power you buy, but with the extra interaction of: its an item. It can be passed around the party, or stolen if you're careless. In both cases, these magic items are really just additional branches of character progression that need little GM adjudication.
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Plot items. These are things GM can award, or the party can work toward, and my preference for plot items is for them to be weird and outside character progression. Maybe can be represented by some kind of boon or bonus, but largely, I like to have them really be 'plot level' powers and not just like, stat or spell modifiers.
If some class or character is weak or unfun, I'd rather fix it through homebrew, than to just shower that player with 'extra' unique loot.
Thanks for the explanation.
I've been enjoying FitD a lot, with the sole exception of XP. I feel like its adds to my work load, and ends up feeling bad for players that do fall behind. I agree that it is a mostly-negligible amount, in terms of 'power loss', but in my experience, players falling behind in XP makes them lose interest in the game, rather than driving them to engage further. Maybe that's just my players not being competitive; I could see a group where that competitive drive would lead them to engage more.
But I ran our game RAW to start (since, as much as I kinda felt I wouldn't enjoy the XP, I think its worth giving systems an honest try RAW before homebrewing things that you don't like), and it definitely felt like the two players that got behind on XP just mostly disengaged, since it gave them a 'what's the point?' feeling, and swapping to milestone reengaged them.
I do like the 'indulging in moments of vice' as a gameplay consideration, but I think it narratively works better as a way to relieve stress, something I more-or-less copped from World of Darkness.